The Canada Pension Plan Investment Board (CPPIB) is investing $375m (€344.6m) in CapitaLand’s Raffles City China Investment Partners III (RCCIP III).
The vehicle, CapitaLand’s third private investment fund in China, is targeting multi-use developments in gateway cities in China.
CPPIB’s investment represents a 25% stake in the vehicle, which has been backed by investors from Asia, North America, and the Middle East. CapitaLand raised $1.5bn for the fund, which has an eight year life.
Jimmy Phua, managing director and head of real estate investments for Asia at CPPIB, said: “Investing in CapitaLand’s new China investment vehicle gives CPPIB the opportunity to expand on our long-term strategy of investing in high-quality commercial real estate in China to deliver solid risk-adjusted returns over the long term.”
Lucas Loh, chief executive of CapitaLand China, said: “China is a market with robust long-term investment potential with continued demand for property riding on the back of urbanisation, economic growth, the rise of the services sector, a growing middle class, and rising domestic consumption.
“These socio-economic themes feature prominently in gateway Chinese cities where the growth trajectory remains robust, heralding opportunities for integrated developments around key transportation hubs.”
The first Raffles City China fund was formed in 2008 with a total size of $1bn, before being increased to $1.2bn.
Raffles City-branded developments in China are held through the series of funds, namely Raffles City Shanghai, Raffles City Beijing, Raffles City Chengdu, Raffles City Ningbo and Raffles City Hangzhou.